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Abercrombie Accounting

8000 Norman Center Drive, Suite 115

Bloomington, MN 55437

 

Phone: 952-835-6065

 

Email: daniel@abercrombieinc.com

Website: abercrombieinc.com

November 2022

Income From PayPal and Other Cash Apps

Insights-and-Tips

If you use PayPal or other electronic payment processors to collect payments from your customers, you’ll need to include that income on your tax return. Even though you might not receive a Form 1099-K from PayPal, Airbnb, or Venmo, it’s still considered taxable income according to the IRS. If you have not received a 1099-K before, it’s more likely you will for 2022 due to the new reporting requirements. (See article Form 1099-K Gets an Overhaul for details).


If your customer paid you via PayPal you could receive a Form 1099-NEC/1099-MISC from your customer and a Form 1099-K from PayPal, resulting in a double reporting of income. So, keep good financial records to support the amount you invoiced your clients. Otherwise, the IRS may conclude that you’ve underreported your income.


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